Quick Growing Annuity Question
How would you go about answering this question during an interview?
Would you rather have $x,xxx growing at a rate of xx% in five years with a discount rate of xx% or would you rather have $x,xxx (smaller number) today?
Thanks!
That depends on your risk profile I guess. If the return is in line with the risk associated with the investment (discount rate) and the investment is optimal within your risk profile, keep it. If not, take the smaller amount today and invest it optimally yourself.
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